Warning inflation may wreck NEST default fund

NEST's reliance on gilts to provide steady growth in its default fund will leave many of the most vulnerable savers with the lowest income exposed to inflation, No Monkey Business (NMB) warns.

NEST's default fund, which people will be opted into unless they actively choose another fund, will contain a mix of global equities, UK gilts, UK index-linked fixed interest, low risk cash management and diversified beta vehicles. Last week, NEST Corp chief investment officer Mark Fawcett revealed plans to invest members' money in three stages; a lower risk foundation stage, followed by a higher risk consolidation stage for the middle section of investors' careers, and finally a low risk consolidation stage. Fawcett argues a loss during the first few years of saving into NEST runs th...